Cash Flow woes

Is there any recurring debt that might be a concern??ÿ You surely aren't driving a $50,000 vehicle with $100,000 worth of gear to rinkydink jobs.?ÿ So, that surely isn't it.?ÿ You surely aren't occupying an office at a high payment per month when you could be landing the same work in far less expensive surroundings.?ÿ Is there a specific part of your gear that you use from time to time but may not be justifying its retention?

It's sounds like the income side should be adequate, so the concern must be on the expense side.

You previously stated your AR`s are in good shape, what's the problem? ?????ÿ

@holy-cow

Brad probably can't figure out whether to put the $500K profit in stocks or muni`s. ???? 

Posted by: @flga

what's the problem?

exactly.?ÿ I can try to expound a little further as time allows.?ÿ Thanks fellas.?ÿ HC is correct on all counts.?ÿ No debt, etc...

What is AGI?

Adjusted Gross Income

@brad-ott

If you wanted a good opinion of the location on the ground, would you call an accountant?

If your current accountant cannot help you, perhaps you have outgrown them.

AR is actually a little light.?ÿ I think this is due to (A) getting so many retainer fees up front, and (B) not turning out finished products with balance due invoices quickly enough.

I think this may be due to having too many mid to large size jobs that require more time to complete, maybe?

The AGI reference (In the United States income tax system,?ÿadjusted gross income?ÿ(AGI) is an individual's total gross income minus specific deductions. Taxable income is?ÿadjusted gross income minus allowances for personal exemptions and itemized deductions)?ÿis just to say that total revenues increased $20k last year and expenses decreased $20k for a net positive swing of $40k, thus a factor in my head scratching...

@brad-ott

Maybe I'm misunderstanding...$20,000 equals a 65% increase?

If you have a 3-4 month backlog, you need to keep bumping your rates up until your on a 2-3 week backlog.

For the last two years I've made the same profit doing half the number of new projects as I have historically taken on annually.?ÿ

I've heard surveyors say they are 6 months behind. They think that is impressive. NOT.

@dave-karoly

no.  78 to 128 does

@rundatline

thanks very much.  I agree with this sentiment & have done so in the past.  But as HC said in October, my current backlog is full of my A+ top notch repeat clients.

I appreciate this discussion, as I think my problem may require some digging to uncover.

Maybe stop looking at AGI as a KPI and instead analyze your top line sales and net revenue to gauge year over year performance.?ÿ Just a thought.?ÿ If your top line sales are increasing along with your net revenue as you seem to be suggesting are you merely having trouble getting the non-retainer cash in the door after you finish your projects??ÿ You said your backlog is comprised of your A+ repeat Clients.?ÿ Are they slow rolling you to help finance their soft costs and you need to sit down with them and reiterate your payment terms??ÿ What is your average days to pay over the last 6 months compared to the previous 6, 12, 18 ect.?

Posted by: @cameron-watson-pls

non-retainer cash in the door after you finish your projects

This takes less than 30 days.?ÿ Usually zero days, as final product is delivered upon final payment, usually.?ÿ Although, if a client has been waiting 14 months for the survey, I will gladly wait 30 days for final payment.

I am starting to think my problem is simply the bottleneck of my ability to start and complete these several mid to larger size jobs quickly enough.

Crew wages:

$10/hr x 2.5 = $25/hr crew fee-minimum rate

$10/hr x 5.0 = $50/hr crew fee-maximum rate

?ÿ

Somewhere in-between should be the sweet spot for your area and clients. Push it too far down and you leak money, too high and you don't get jobs.

I've also saved money and put it in my pocket by taking on some duties, getting rid of dumb stuff associated with the office, looking at minor things like toner, maintenance of equipment, cell phones, credit cards, mailing, the list seems endless.

But relentless billing and keeping on top of getting jobs out the door is #1.

?ÿ

@brad-ott

Are you billing monthly or at completion of jobs?

For new clients and most of our existing clients, I get the low end of the estimated range for the retainer or what I think we will bill in a month and ask them to replenish retainer before proceeding.

You could require the payment in full, prior to delivering product?

@la-stevens

good questions/comments.

no, because for example I already got their $6,000 retainer fee months ago, and have not yet started the work.  Multiply this by about 6 to 10 other jobs...

@mightymoe

I get at least $220 per one man crew per hour.

@brad-ott

Waiting 14 months? Folks around here get antsy after a couple of days.

If they are willing wait that long, you have the bull by the horns, keep raising your rates until your work load is manageable.